Do You Owe the IRS? How to Find Out

Owing back taxes to the internal revenue service is something every individual should avoid. However, if you find yourself in this situation, you will need to commence the settlement of your bill as soon as possible. This is because when you fail to settle your bills, you will keep increasing interests as well as penalties.

The question most people ask is: How do you know if you are owing the IRS unpaid taxes? It’s simple but you have to take time to understand the process. For taxpayers who want to find out if they have an outstanding bill, we have come up with a guide to walk you through the process. Please read on as we explain more.

How to Find Out if You Owe the IRS

The following are some ways you can discover if you owe tax debt:

Email Notification from IRS

The IRS will notify you via an official email detailing your back taxes. If you need clarifications, you can also reply via the same mail or you call the contact phone number included in the mail. To avoid getting scammed, note that the internal revenue service will never text or contact you via phone or social media at the initial stage. All communications are routed through the email address provided by the taxpayer.

Viewing Tax Account on IRS Website

Every taxpayer has an online tax account where the amount owed is displayed. You can set up a payment agreement online and review your payment history to get more information.

Filing for Tax Returns

You can determine your back taxes by filing for the tax return of the previous year. With the information provided, you can determine your bills.

Call the IRS Support Line

This is a good way to get the needed information about your back tax. While this gives you direct information about your dashboard, it may be a bit difficult to connect with a live agent as the line is often overwhelmed. Most times BOTs are programmed to respond to inquiries and this may not provide the needed solution especially if you need urgent answers.

What are the Penalties for Owing the IRS?

Owing the internal revenue service is never a good thing. However, if you are seeking to know the penalties attached to overdue back taxes, you will find some of them below:

Filing of Tax Lien

This is a legal document that allows the IRS to lay claim on one’s property due to a default in the payment of taxes. With this, they are also empowered to confiscate property like vehicles or real estate.

Seizure of Liquid Assets

The internal revenue service is empowered by law to seize liquid assets like retirement income, wages, social benefits, and bank accounts.

Finally, not being able to clear your back tax can affect your credit score. This will also affect your ability to secure loans from financial institutions and this is not what you want for yourself. To find ways to improve your credit score, you can check here.

How to Get Tax Relief

If one is owing the IRS, you can go for tax relief through a reputable firm. Here are the processes involved:

Consult with Experts

The first step is to reach out to tax experts and seek their advice on your situation. Most reputable firms do not charge for consultation and they commence other necessary proceedings to get relief from the back tax immediately.

Investigation of Details Provided

After consultations, the next step is to find out the reason for the debt, the amount owed, and the best measure to handle your situation. At this point, a connection with the IRS will be established and this usually takes between two to four weeks before the tax debt summary is reviewed.

Resolution Phase

This is the point where a viable resolution is proposed to the IRS and then a response is awaited. Usually, it takes between 3 to 9 months before an agreement is reached and if you are working with a reputable firm, it will certainly be in your favor. This is because they will keep their discussion lines open until a favorable agreement is reached for the taxpayer.

These are some tips to help you understand back tax and how to get tax relief. You can also avoid getting into debt by saving your funds. If you need tips on how to develop a saving habit, you can check here: https://www.forbes.com/advisor/banking/ways-to-make-saving-money-a-habit/

Conclusion

Citizens are required to pay tax to the government annually. The amount accrued to each individual is dependent on factors such as occupation and earnings from the previous year. While most people can foot their bills comfortably, some people struggle with it. We have outlined some tips to help you with clearing your debts. Please feel free to check them out.